Anniversaries, Smart Money, and Regulation: It’s all about Trust!

It’s been a quiet month for gold, with the yellow metal up slightly, despite a reduction in net longs, minor ETF outflows, and a rally in risk assets. Sentiment has definitely turned though, with a buy-the-dips mentality emerging amongst banks, including UBS and Credit Suisse, whilst Peter Grandich thinks “the mother of all gold bull markets” is only just starting. Whilst gold awaits its next driver (Jackson Hole?), there’s been no shortage of interesting developments in other markets, with negative yielding debt topping USD $13 trillion, prompting Robin Wigglesworth of the FT to note that; “investors are now buying bonds for capital gain, and equities for income”, with bond inflows soaring. We’ve also “celebrated” the 45th anniversary of non-gold backed USD, a period in which nearly all income gains have gone to the top 1% of earners. Interestingly, this has corresponded with a large drop in interpersonal trust attitudes in the USA, and increase in regulation (studies show they go hand in hand), prompting one to recall Tacitus; “the more corrupt the state, the more numerous the laws” (VIEW LINK)